Additional Smuggling and Tax Evasion Methods

Alcohol Smuggling

News and statistics about the illegal alcohol trade. Smuggling of alcohol to evade taxes, modern day bootlegging, and data about counterfeit alcohol and sprits is collected from security agencies, criminal justice programs and other public sources.

Customs officials in Ireland broke up a counterfeit vodka operation that was managed by the Irish Republican Army (IRA) that is estimated to have been a multimillion euro moonshine operation.

In a raid by Custom agents, nearly 1110,000 bottles caps, 400,000 fake labels of popular vodka brands, 500 cardboard boxes and a bottling plant was seized in May 2014.

Intelligence officials state that the IRA is potentially bringing in fake alcohol from Eastern Europe, and is filling up empty bottles with counterfeit alcohol. IRA members collected empty spirit bottles from bars and pubs across Ireland and bring them back to the operations center. There, the bottles are washed and the new labels and bottle tops are attached. The new fake bottles of vodka are then sold to bar owners and vendors across Ireland and the United Kingdom. The moonshine bottles, known as Provo vodka, is readily available across Northern Ireland and is often sold at places where smuggled cigarettes are also available.

The vodka labels discovered by security officials included Smirnoff and Stolichnaya.

According to the International Chamber of Commerce and the Federation of Indian Chambers of Commerce and Industry, the sales of counterfeits and smuggling of fake goods into India caused sales losses of $11.9 Billion in 2012. This amount represented 21.7 percent of sales losses to companies.

In Febraury 2014, Interpol and Europol reported on global raids conducted against producers and sellers of counterfeit foods.

In total, over 1,200 tonnes of counterfeit and substandard food and nearly 430,000 liters of counterfeit beverages were seized across 33 countries. 96 people were arrested by various criminal justice programs during the investigation.

Highlights of the campaign against counterfeit foods:

Across Europe, over 131,000 liters of fake oil and vinegar , 80,000 counterfeit biscuits and chocolate bars, 20 tonnes of fake spices and condiments, and 45 tonnes of substandard dairy products were seized by Europol.

Criminal justice programs in Russia reported that sales of counterfeit whiskey in the country may have been worth $230 Million (8 Billion Rubles) in 2013.

Based on sales and import tracking data, the State Statistics Service in Russia reported that retailers sold 9.9 million more liters of whiskey than officially imported. Officials believe that this figure represents the number of counterfeit whiskey bottles sold in the country.

In 2012, an estimated 7.8 million liters of fake whiskey was sold in Russia.

Media in Russia reported that whiskey is the most popular alcohol to be counterfeited in the country, followed by rum and tequila.

In the first ten months of 2013, authorities in Ireland seized 929 liters of counterfeit alcohol across the country. In 2012, the number of fake alcohol bottles that were seized total 232. Vodka was reported to be the most counterfeited bottle in 2013.

Criminal justice programs state that counterfeiters use legitimate alcohol bottles when making counterfeits. The real bottles are taken from recycling centers or directer from bars and pubs. The bottles are then filled with raw alcohol and then diluted with water to achieve a 37.5 to 40 percent alcohol by volume.

Although bootleg alcohol seizures increased in 2013, the number of cigarette packs seized from the black market decreased in Ireland. In 2012, a total of 95 million cigarettes were seized across Ireland. In 2013, the number of smuggled cigarettes seized decreased to 37.7 million.

In the English city of Sheffield, security officers and public health programs are seeing an increase in illegal bottles of counterfeit alcohol.

In the 2011 to 2012 fiscal year, officials in the city seized 554 bottles of counterfeit alcohol. In the 2012-2013 fiscal year, the number of fake bottles seized increased to 1,470. Halfway through the 2013-2014 fiscal year, authorities have already seized 2,370 bottles of counterfeit alcohol.

Most of the fake alcohol bottles are marketed as Vodka. After studying the bottles, Trading Standards officials have determined that most of the alcohol that is used in the fake bottles are either cleaning fluids or antifreeze. With the other chemicals, the fake bottles of vodka end up being made of 57 percent alcohol.

Sheffield is not the only city in the United Kingdom facing threats from counterfeit alcohol. In Scotland, security services with HMRC seized 13,000 liters of counterfeit vodka in September 2013 alone.

Security experts state that price is a main cause for the counterfeits. For a single 70cl bottle of vodka, the duty and VAT is $14.52 (£8.89).

22 percent of the alcohol sold in Costa Rica is sold illegally without the payment of taxes, according to the Finance Ministry. Over 90 percent of the contraband alcohol is smuggled into the country.

Financial authorities also seized 12.3 million black market cigarettes that were being smuggled without the payment of duties in the first 10 months of 2013. The amount of illegal tobacco seized was 5 times higher than the 2.3 million black market cigarettes that were seized in all of 2012.

In a span of two months, 52 people died in Indonesia after consuming alcohol tainted with methanol. Security investigations have found that bar owners have been mixing and producing their own alcohol on the black market in order to increase their profits.

Investigators with criminal justice programs have found that some producing have been using industrial strength methanol to increase the potency of alcoholic drinks. 10 milliliters of methanol is enough create formic acid in a person’s body and cause blindness. 30 milliliters, or the same amount as one shot of liquor, can kill a person.